Campus Bookstore is the only textbook supplier in the town,a profit-maximizing business.The table below represents the reservation prices for the eight students enrolled in the class for which this book is required. $$\begin{array} { c c }
\text { Customer } & \begin{array} { c }
\text { Reservation Price } \
\text { (\$/book) }
\end{array} \
\mathrm { Q } & 60 \
\mathrm { R } & 54 \
\mathrm {~S} & 48 \
\mathrm {~T} & 42 \
\mathrm { U } & 36 \
\mathrm {~V} & 30 \
\mathrm {~W} & 24 \
\mathrm { X } & 18
\end{array}$$
Assume that the marginal and average total cost for each book is $12.
Refer to the information above.If the bookstore is selling the socially efficient number of books,how many will it sell?

Question

Campus Bookstore is the only textbook supplier in the town,a profit-maximizing business.The table below represents the reservation prices for the eight students enrolled in the class for which this book is required. $$\begin{array} { c c } 
\text { Customer } & \begin{array} { c } 
\text { Reservation Price } \
\text { (\$/book) }
\end{array} \
\mathrm { Q } & 60 \
\mathrm { R } & 54 \
\mathrm {~S} & 48 \
\mathrm {~T} & 42 \
\mathrm { U } & 36 \
\mathrm {~V} & 30 \
\mathrm {~W} & 24 \
\mathrm { X } & 18
\end{array}$$
Assume that the marginal and average total cost for each book is $12.
Refer to the information above.If the bookstore is selling the socially efficient number of books,how many will it sell?

Quizplus · Accepted Answer

The socially efficient quantity is where the price equals the marginal cost. Here, the marginal cost is $12, so the bookstore should sell to all students whose reservation price is at least $12. All 8 students have a reservation price higher than $12, so the bookstore will sell 8 books.

Campus Bookstore Is the Only Textbook Supplier in the Town,a